Novomatic's Gaming Technology Group Switches to Inspired Entertainment Ownership Following the Purchase

Gaming Technology Group (GTG), the UK subsidiary of entertainment industry giant, Novomatic from Austria, is being bought for $120 million by Inspired Entertainment.

All the brands and companies that belong to GTG will end up in ownership of Inspired, and it's these six: Gamestec Leisure, Playnation Limited, AstraGames Limited, Bell-FruitGroup, Harlequin Gaming Limited and Innov8 Gaming Limited.

UK Expansion

The driving idea behind this business move...

...is that, through the acquisition of all these businesses, Inspired will be wildly diversifying their UK operations and would be able to expand into other sectors – namely, because all of the companies listed above come with B3, C and D categories which will compliment Inspired's own B2 and B3 categories.

As Lorne Weil, CEO puts it:

“The potential acquisition of NTG is transformational for Inspired, enabling us to dramatically increase the size, scale and scope of our business by combining our highly complementary, but largely non-overlapping, businesses. We expect to leverage our superior game content, technology, operational capabilities and respective footprints to augment the existing growth trends for our enterprise.”

Why This Acquisition?

Inspired will receive between $12 and $13 million in synergies after the purchase is completed, through shared costs and increase of scale. There are several approvals on the regulatory end that this purchase must go through before the sale is completed in Q3...

...but with that out of the way, the company will be in a good position to exploit shared manufacturing, engineering, software developments and customer service that will maintain growth and provide sufficient financial backing.

Over 75,000 gaming machines in the UK and Europe will be under their ownership eventually, which will be a great asset to have after the disappointing results in the first quarter, when company officials reported the 10.1% decline in revenue due to the gaming division's poor performance.

Planned Steps

Weil provided further insight into what his company intends to do with this acquisition:

“Inspired and NTG currently operate in different segments but have much in common in terms of providing resources for our customers and their consumers. This combination would provide additional resources for our core businesses and combine the great content and machine portfolio from each. We expect to be able to deliver meaningful value to our shareholders as the acquisition is integrated.”

From the standpoint of companies that have been acquired in this venture...

...Innov8 Gaming develops and distributes gaming machines of B3 and C category, while Gamestec supplies the UK pub sector with the same. Playnation is providing the UK holiday and leisure industry with gaming terminals...

...whereas Bell-Fruit Group sells and delivers machines of the C category to European countries. AstraGames is creating gaming machines of B, C and D categories. Harleqiun Gaming is a game developing studio that delivers its content to AstraGames and Bell-Fruit Group.

Source:

“Inspired Announces Agreement to Acquire Novomatic UK’s Gaming Technology Group”, inseinc.com, June 11, 2019.